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Posted by on Sep 1, 2007 in At TMV | 4 comments

Things Have to Get Worse… Before They Get Better

Bob Herbert writes at the New York Times:

You know you’ve stepped into a different universe when you hear a major American labor leader saying matter-of-factly that employer-based health insurance and employer-based pensions are relics of a bygone industrial economy.

Andrew Stern, president of the Service Employees International Union, which has 1.9 million members and is the fastest-growing union in the country, is not your ordinary union leader. With Labor Day approaching, he was reflecting on some of the challenges facing workers in a post-20th-century globalized economy.

“I just don’t think that as a country we’ve conceptualized that this is not our father’s or our grandfather’s economy,” Mr. Stern said in an interview. “We’re going through profound change and we have no plan.”

The feeling that seems to override all others for workers is anxiety. American families, already saddled with enormous debt, are trying to make it in an environment in which employment is becoming increasingly contingent and subject to worldwide competition. Health insurance, unaffordable for millions, is a huge problem. And guaranteed pensions are going the way of typewriter ribbons and carbon paper.

“We’re ending defined benefit pensions in front of our eyes,” said Mr. Stern. “I’d say today’s retirement plan for young workers is: ‘I’m going to work until I die.’ ”

In the Netherlands we have the same problem (in this regard at least): because of the expensive nature of the welfare state, my generation has to work until age 70 or so. When I am 40, I have to earn enough money for myself and for at least one other person. The generation currently in charge of things is worried by this prospect (because they know that my generation will have a hard time taking care of them). Therefore, they are cutting a bit in programs, but it is not nearly enough. The reason is, of course, that although they worry about us (and about themselves), they do not do so nearly enough. They seem to be more busy taking care of their own immediate (and not so immediate) needs, than about the needs of the next generations.

The result is that either some conservatives stand up and cause the population a lot of pain now, or that moderate socialists continue to rule and continue to shove the problems of today on my generation and the next generations. For now, I fear that it will be the second options.

Back to America and Herbert’s column: Herbert writes that the result of the situation in America – combined with problems as the mortgage and housing crisis – is fear. American workers are afraid. John Doe fears that he might lose his job, his insurance, his pension. Perhaps even more, they do not just fear for themselves; they fear that their children will not do better than they did in life. The belief that one’s children will have it better than oneself is one of the main engines of American society.

Of course, this is all quite problematic, but what is even more problematic according to Mr. Stein is that America does not have any real leadership. They “We’re a team in the 21st-century period of rapid change and competition, and right now, we don’t have leadership, and we don’t have a plan. At the same time, a group of people are enriching themselves far beyond anything that’s reasonable.”

How to deal with this problem? Herbert explains:

What he would like to see, he said, is a large group of thoughtful people from various walks of American life — business, labor, government, academia and so forth — convened to begin the serious work of cooperatively developing a real-world vision of a society that is fairer, healthier, better educated, better prepared to compete globally, and more economically secure.

We all have our dreams, of course. For this to happen, people have to ignore their own immediate needs and instead focus on what serves America best in the long run. Many people will first be worse off than they are now, before they will be better off. This sounds logical – and basically everyone knows it – but the problem in a democracy with thousands of lobbyists (and unions for that matter) is that it is difficult to get people so far as to support decisions that hurt them personally.

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